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PROSPECTUS MAY 1, 1996
THE DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND, INC.
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THE DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND, INC. (THE "FUND") IS
AN OPEN-END, DIVERSIFIED, MANAGEMENT INVESTMENT COMPANY, KNOWN AS A MUTUAL
FUND, THAT IS INTENDED TO BE A FUNDING VEHICLE FOR VARIABLE ANNUITY CONTRACTS
AND VARIABLE LIFE INSURANCE POLICIES TO BE OFFERED BY THE SEPARATE ACCOUNTS
OF VARIOUS LIFE INSURANCE COMPANIES (THE "PARTICIPATING INSURANCE
COMPANIES"). THE PRIMARY GOAL OF THE FUND IS TO PROVIDE CAPITAL GROWTH.
CURRENT INCOME IS A SECONDARY GOAL. THE FUND INVESTS PRINCIPALLY IN COMMON
STOCKS, OR SECURITIES CONVERTIBLE INTO COMMON STOCK, OF COMPANIES WHICH, IN
THE OPINION OF THE FUND'S MANAGEMENT, NOT ONLY MEET TRADITIONAL INVESTMENT
STANDARDS, BUT ALSO SHOW EVIDENCE THAT THEY CONDUCT THEIR BUSINESS IN A
MANNER THAT CONTRIBUTES TO THE ENHANCEMENT OF THE QUALITY OF LIFE IN AMERICA.
THE DREYFUS CORPORATION ("DREYFUS") SERVES AS THE FUND'S INVESTMENT
ADVISER. NCM CAPITAL MANAGEMENT GROUP, INC. ("NCM") SERVES AS THE FUND'S
SUB-INVESTMENT ADVISER AND PROVIDES DAY-TO-DAY MANAGEMENT OF THE FUND'S
PORTFOLIO.
THIS PROSPECTUS SETS FORTH CONCISELY INFORMATION ABOUT THE FUND
THAT AN INVESTOR SHOULD KNOW BEFORE INVESTING IN THE FUND THROUGH CERTAIN
VARIABLE ANNUITY CONTRACTS AND VARIABLE LIFE INSURANCE POLICIES OFFERED BY
PARTICIPATING INSURANCE COMPANIES. IT SHOULD BE READ AND RETAINED FOR FUTURE
REFERENCE.
THE STATEMENT OF ADDITIONAL INFORMATION, DATED MAY 1, 1996, WHICH
MAY BE REVISED FROM TIME TO TIME, PROVIDES A FURTHER DISCUSSION OF CERTAIN
AREAS IN THIS PROSPECTUS AND OTHER MATTERS WHICH MAY BE OF INTEREST TO SOME
INVESTORS. IT HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION AND
IS INCORPORATED HEREIN BY REFERENCE. FOR A FREE COPY, WRITE TO THE FUND AT
144 GLENN CURTISS BOULEVARD, UNIONDALE, NEW YORK 11556-0144, OR CALL
1-800-645-6561. WHEN TELEPHONING ASK FOR OPERATOR 144.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
OR ENDORSED BY, ANY BANK, AND ARE NOT FEDERALLY INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER AGENCY.
THE NET ASSET VALUE OF FUNDS OF THIS TYPE WILL FLUCTUATE FROM TIME TO TIME.
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<TABLE>
TABLE OF CONTENTS
PAGE PAGE
<S> <C> <C> <C>
CONDENSED FINANCIAL INFORMATION....... 2 HOW TO REDEEM SHARES.................... 8
DESCRIPTION OF THE FUND............... 2 SHAREHOLDER SERVICES PLAN............... 8
SPECIAL CONSIDERATIONS................ 3 DIVIDENDS, DISTRIBUTIONS AND TAXES...... 8
MANAGEMENT OF THE FUND................ 5 PERFORMANCE INFORMATION................. 9
HOW TO BUY SHARES..................... 7 GENERAL INFORMATION..................... 9
</TABLE>
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
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FUND SHARES ARE AVAILABLE EXCLUSIVELY AS A POOLED FUNDING VEHICLE FOR LIFE
INSURANCE COMPANIES WRITING ALL TYPES OF VARIABLE LIFE INSURANCE POLICIES AND
VARIABLE ANNUITY CONTRACTS. THIS PROSPECTUS SHOULD BE ACCOMPANIED BY THE
PROSPECTUS FOR SUCH POLICIES AND CONTRACTS.
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CONDENSED FINANCIAL INFORMATION
The information in the following table has been audited by Ernst &
Young LLP, the Fund's independent auditors, whose report thereon appears in
the Fund's Statement of Additional Information. Further financial information
and related notes are included in the Statement of Additional Information,
available upon request.
FINANCIAL HIGHLIGHTS
Contained below is per share operating performance data for a share
of Common Stock outstanding, total investment return, ratios to average net
assets and other supplemental data for each year indicated. This data has
been derived from the Fund's financial statements. The Fund's total
investment return shown below does not include expenses charged a separate
account or related insurance policy by a Participating Insurance Company,
inclusion of which would reduce the Fund's total investment return for each
period indicated.
<TABLE>
YEAR ENDED DECEMBER 31,
-------------------------------------------
1993(1) 1994 1995
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<S> <C> <C> <C>
PER SHARE DATA:
Net asset value, beginning of year................................. $12.50 $13.38 $13.23
------- ------ ------
INVESTMENT OPERATIONS:
Investment income--net............................................ .04 .35 .08
Net realized and unrealized gain (loss) on investments.............. .88 (.15) 4.49
------- ------ ------
TOTAL FROM INVESTMENT OPERATIONS.................................... .92 .20 4.57
------- ------ ------
DISTRIBUTIONS:
Dividends from investment income-net................................ (.04) (.35) (.08)
------- ------ ------
Dividends from net realized gain on investments..................... -- -- (.41)
------- ------ ------
TOTAL DISTRIBUTIONS................................................. (.04) (.35) (.49)
------- ------ ------
Net asset value, end of year........................................ $13.38 $13.23 $17.31
====== ======= ======
TOTAL INVESTMENT RETURN............................................... 7.35%(2) 1.49% 34.56%
RATIOS / SUPPLEMENTAL DATA:
Ratio of expenses to average net assets............................. .06%(2) .25% 1.27%
Ratio of net investment income to average net assets................ .64%(2) 4.58% .70%
Decrease reflected in above expense ratios due to
undertakings by Dreyfus and Sub-Investment Adviser.................. 6.19%(2) 2.60% .06%
Portfolio Turnover Rate............................................. -- 373.68% 88.52%
Net Assets, end of year (000's omitted)............................. $1,372 $10,406 $31,657
- ----------------
(1) From October 7, 1993 (commencement of operations) to December 31, 1993.
(2) Not annualized.
</TABLE>
Further information about the Fund's performance is contained in
the Fund's annual report, which may be obtained without charge by writing to
the address or calling the number set forth on the cover page of this
Prospectus.
DESCRIPTION OF THE FUND
GENERAL -- The Fund is intended to be a funding vehicle for variable annuity
contracts ("VA contracts") and variable life insurance policies ("VLI
policies") to be offered by the separate accounts of Participating Insurance
Companies. Individual VA contract holders and VLI policy holders are not the
"shareholders" of the Fund. Rather, the Participating Insurance Companies and
their separate accounts are the shareholders (the "shareholders"), although
such Participating Insurance Companies will pass through voting rights to
their VA contract holders and VLI policy holders. The VA contracts and the
VLI policies are described in the separate prospectuses issued by the
Participating Insurance Companies over which the Fund assumes no
responsibility. The Fund currently does not foresee any disadvantages to the
holders of VA contracts and VLI policies arising from the fact that the
interests of the holders of such contracts and policies may differ.
Nevertheless, for so long as the Fund is a funding vehicle for VA contracts
and VLI policies, the Fund's Board of Directors will monitor events in order
to identify any material conflicts which may arise and to determine what
action, if any, should be taken in response thereto. Should any conflict
between VA contract holders and VLI policy holders arise, a separate account
may be required to withdraw from participation in
Page 2
the Fund. Such a withdrawal could have a disruptive effect on orderly
portfolio management to the potential detriment of VA contract holders and
VLI policy holders.
INVESTMENT OBJECTIVES -- The Fund's primary goal is to provide capital growth
through equity investment in companies that, in the opinion of the Fund's
management, not only meet traditional investment standards but which also
show evidence that they conduct their business in a manner that contributes
to the enhancement of the quality of life in America. Current income is
secondary to the primary goal. There can be no assurance that the Fund's
investment objectives will be achieved.
SPECIAL CONSIDERATIONS
TYPES OF COMPANIES SOUGHT FOR INVESTMENT -- To assess whether a company
contributes to the enhancement of the quality of life in America, the Fund
considers a company's record in the areas of (1) protection and improvement
of the environment and the proper use of our natural resources, (2) occupation
al health and safety, (3) consumer protection and product purity, and (4)
equal employment opportunity. There are few generally accepted measures of
achievement in these areas. The development of suitable measurement
techniques, therefore, will be largely within the discretion and judgment of
the management of the Fund. Management does not intend at present to evaluate
in depth a company's activities not directly connected with the conduct of
its business (such as participation in community improvement projects) or the
secondary implications of corporate activities (for example, in examining
banks, the business activities of their borrowers will not be evaluated).
The Fund's special considerations tend to limit the availability of
investment opportunities more than is customary with other investment
companies, including those managed by Dreyfus. Management believes, however,
that there are sufficient investment opportunities among companies which meet
the Fund's special considerations to permit full investment, if management
believes it desirable, in securities which meet the Fund's investment
objective of capital growth through equity investment.
The Fund's objectives and special considerations above cannot be
changed without approval by the holders of a majority, as defined in the
Investment Company Act of 1940, as amended (the "1940 Act"), of the Fund's
outstanding voting shares.
The Fund's Board of Directors may adopt additional criteria or
restrictions governing the Fund's investments if the Board of Directors
determines that the new criteria or restrictions are consistent with the
Fund's objective of investing in a socially responsible manner, but the Board
may not change the four existing special considerations described above.
THE INVESTMENT SELECTION PROCESS -- Potential investment portfolio selections
(based on traditional investment considerations, including an opinion of the
fundamental value of the security and other market factors) are designated to
the Dreyfus research staff. The staff begins a process of searching publicly
available information about the company to determine its record in the areas
of special concern to the Fund. Researchers use commercially available
computer data bases and reviews and evaluations published or made available
by "watchdog" groups whose interests focus on one or more of the special
areas, such as the environment, equal employment opportunity, product safety
or occupational safety and health, as applicable. Additional data may be
obtained, where practical, from local, state and federal agencies which
maintain surveillance in certain areas of interest to the Fund and which
provide this data to the public.
If the initial evaluation reveals no negative pattern in the areas
of special concern to the Fund, a company's securities are eligible for
purchase. The research staff supplements this initial screening by asking the
company to complete a questionnaire designed by the Fund to aid in the
evaluation of the company's conduct in the areas of special concern. The
examination of a company may also include personal interviews with company
officials, inspection of facilities and other techniques that may be
applicable to specific companies or industries.
If it is determined at any stage that purchase or retention of the
portfolio securities is not consistent with the Fund's goal of investing in
companies whose conduct contributes to the enhancement of the quality of life
in America, the security will not be purchased or if already purchased will
be sold as expeditiously as possible, consistent with the best interests of
the Fund.
Page 3
The Board will review new portfolio acquisitions in light of the
Fund's special concerns at their next regular meeting. While the Board of
Directors will disqualify a company evidencing a pattern of conduct that is
inconsistent with the Fund's special standards, the Board need not disqualify
a company on the basis of incidents that, in the Board's judgment, do not
reflect the company's policies and overall current level of performance in
the areas of special concern to the Fund. The performance of companies in the
areas of special concern are reviewed regularly to determine their continued
eligibility.
MANAGEMENT POLICIES -- Depending on market conditions, the Fund attempts to
be fully invested in common stock, or securities convertible into common
stock, which meet both traditional investment standards and the Fund's
investment criteria described under "Types of Companies Sought for
Investment."
As a fundamental policy, the Fund is permitted to borrow to the
extent permitted under the 1940 Act. However, the Fund currently intends to
borrow money only for temporary or emergency (not leveraging) purposes, in an
amount up to 15% of the value of the Fund's total assets (including the
amount borrowed) valued at the lesser of cost or market, less liabilities
(not including the amount borrowed) at the time the borrowing is made. While
borrowings exceed 5% of the Fund's total assets, the Fund will not make any
additional investments.
The Fund may invest up to 15% of the value of its net assets in
securities which are illiquid securities, provided such investments are
consistent with the Fund's investment objective. Illiquid securities are
securities which are not readily marketable, such as certain securities that
are subject to legal or contractual restrictions on resale, repurchase
agreements providing for settlement in more than seven days after notice, and
certain options traded in the over-the-counter market and securities used to
cover such options. Investment in illiquid securities subjects the Fund to
the risk that it will not be able to sell such securities when it may be
opportune to do so.
During periods in which management believes adverse trends are
occurring in the financial markets or the economy, the Fund may adopt a
temporary defensive posture to preserve shareholders' capital by investing in
U.S. Government securities, and also in corporate bonds, high grade
commercial paper, repurchase agreements, time deposits, bank certificates of
deposit, bankers' acceptances and other short-term bank obligations issued in
this country as well as those issued in dollar denominations by the foreign
branches of U.S. banks, and cash or cash equivalents, without limit as to
amount, as long as such investments are made in securities of eligible
companies and domestic banks. When the Fund has adopted a temporary defensive
posture, the entire portfolio can be so invested. During such periods, the
Fund may not achieve its investment objectives.
Repurchase agreements involve the acquisition by the Fund of an
underlying debt instrument subject to an obligation of the seller to
repurchase, and the Fund to resell, the instrument at a fixed price, usually
not more than one week after its purchase. The Fund's custodian will have
custody of, and will hold in a segregated account, securities acquired by the
Fund under a repurchase agreement. Repurchase agreements are considered by
the staff of the Securities and Exchange Commission to be loans by the Fund.
In an attempt to reduce the risk of incurring a loss on a repurchase
agreement, the Fund will enter into repurchase agreements only with domestic
banks with total assets in excess of one billion dollars or primary
government securities dealers reporting to the Federal Reserve Bank of New
York, with respect to securities of the type in which the Fund may invest,
and the Fund will require that additional securities be deposited with its
custodian if the value of the securities purchased should decrease below
resale price. Dreyfus will monitor on an ongoing basis the value of the
collateral to assure that it always equals or exceeds the repurchase price.
Certain costs may be incurred by the Fund in connection with the sale of the
securities if the seller does not repurchase them in accordance with the
repurchase agreement. In addition, if bankruptcy proceedings are commenced
with respect to the seller of the securities, realization on the securities
by the Fund may be delayed or limited. The Fund will consider on an ongoing
basis the creditworthiness of the institutions with which it enters into
repurchase agreements.
Certificates of deposit are negotiable certificates evidencing the
obligation of a bank to repay funds deposited with it for a specified period
of time.
Page 4
Time deposits are non-negotiable deposits maintained in a banking
institution for a specified period of time (in no event longer than seven
days) at a stated interest rate. Time deposits which may be held by the Fund
will not benefit from insurance from the Bank Insurance Fund or the Savings
Association Insurance Fund administered by the Federal Deposit Insurance
Corporation.
To earn additional income on its portfolio, the Fund may write
(sell) covered call option contracts on securities it owns to the extent of
20% of the value of its net assets at the time such option contracts are
written. A call option gives the purchaser of the option the right to buy,
and obligates the writer to sell, the underlying security at the exercise
price at any time during the option period. A covered call option sold by the
Fund, which is a call option on a security owned by the Fund, exposes the
Fund during the term of the option to possible loss of opportunity to realize
appreciation in the market price of the underlying security or to possible
continued holding of a security which might otherwise have been sold to
protect against depreciation in the market price of the security.
A more detailed description of the securities in which the Fund may
invest can be found in the Statement of Additional Information.
The Fund may invest in companies with substantial overseas
activities, but, at present, management will not examine corporate activities
carried on outside the United States.
CERTAIN FUNDAMENTAL POLICIES -- The Fund may (i) borrow money to the extent
permitted under the 1940 Act; (ii) invest up to 5% of the value of its total
net assets in the securities of any one issuer (except securities of the U.S.
Government or any instrumentality thereof); (iii) invest in companies having
less than three years continuous operating history (including that of
predecessors) but only in an amount up to 5% of the value of its net assets;
and (iv) invest up to 25% of the value of its total assets in any single
industry. This paragraph describes fundamental policies of the Fund which
cannot be changed without approval by the holders of a majority (as defined
in the Act) of the Fund's outstanding voting shares. See "Investment
Objectives and Management Policies_Investment Restrictions" in the Fund's
Statement of Additional Information.
CERTAIN ADDITIONAL NON-FUNDAMENTAL POLICIES -- The Fund may (i) pledge,
hypothecate, mortgage or otherwise encumber its assets, but only to secure
permitted borrowings; and (ii) invest up to 15% of the value of its net
assets in repurchase agreements providing for settlement in more than seven
days after notice and in other illiquid securities. See "Investment
Objectives and Management Policies _ Investment Restrictions" in the Fund's
Statement of Additional Information.
INVESTMENT CONSIDERATIONS -- The Fund will not seek to realize profits by
anticipating short-term market movements. When market conditions permit, the
Fund generally intends to retain securities for at least the applicable
statutory long-term capital gain period. The annual portfolio turnover rate
indicates the rate of change in the Fund's portfolio; for instance, a rate of
100% would result if all the securities in the portfolio at the beginning of
an annual period had been replaced by the end of the period. While the rate
of portfolio turnover will not be a limiting factor when management deems
changes appropriate, it is anticipated that, in view of the Fund's investment
objectives, its annual turnover rate generally should not exceed 75%. When
extraordinary market conditions prevail, a higher turnover rate and increased
brokerage expenses may be expected.
Investment decisions for the Fund are made independently from those
of other investment companies advised by Dreyfus. However, if such other
investment companies are prepared to invest in, or desire to dispose of,
securities of the type which the Fund invests in at the same time as the
Fund, available investments or opportunities for sales will be allocated
equitably to each investment company. In some cases, this procedure may
adversely affect the size of the position obtained for or disposed of by the
Fund or the price received by the Fund.
MANAGEMENT OF THE FUND
INVESTMENT ADVISER -- Dreyfus, located at 200 Park Avenue, New York, New York
10166, was formed in 1947 and serves as the Fund's investment adviser.
Dreyfus is a wholly-owned subsidiary of Mellon Bank, N.A., which is a
wholly-owned subsidiary of Mellon Bank Corporation ("Mellon"). As of March
29, 1996, Dreyfus managed or administered approximately $82 billion in assets
for approximately 1.7 million investor accounts nationwide.
Page 5
Dreyfus supervises and assists in the overall management of the
Fund's affairs under a Management Agreement with the Fund, subject to the
overall authority of the Fund's Directors in accordance with Maryland law.
Mellon is a publicly owned multibank holding company incorporated
under Pennsylvania law in 1971 and registered under the Federal Bank Holding
Company Act of 1956, as amended. Mellon provides a comprehensive range of
financial products and services in domestic and selected international
markets. Mellon is among the twenty-five largest bank holding companies in
the United States based on total assets. Mellon's principal wholly-owned
subsidiaries are Mellon Bank, N.A., Mellon Bank (DE) National Association,
Mellon Bank (MD), The Boston Company, Inc., AFCO Credit Corporation and a
number of companies known as Mellon Financial Services Corporations. Through
its subsidiaries, including Dreyfus, Mellon managed more than $233 billion in
assets as of December 31, 1995, including approximately $81 billion in
proprietary mutual fund assets. As of December 31, 1995, Mellon, through
various subsidiaries, provided non-investment services, such as custodial or
administration services, for more than $786 billion in assets including
approximately $60 billion in mutual fund assets.
Under the Management Agreement, the Fund has agreed to pay Dreyfus an
annual fee, payable monthly, at the annual rate of .75 of 1% of the value of
the Fund's average daily net assets. For the fiscal year ended December 31,
1995 the Fund paid Dreyfus a management fee at an effective annual rate of
.69 of 1% of the value of the Fund's average daily net assets pursuant to an
undertaking by Dreyfus.
The fee paid to Dreyfus is higher than that paid by most other
investment companies.
In allocating brokerage transactions for the Fund, Dreyfus seeks to
obtain the best execution of orders at the most favorable net price. Subject
to this determination, Dreyfus may consider, among other things, the receipt
of research services and/or the sale of shares of the Fund or other funds in
the Dreyfus Family of Funds as factors in the selection of broker-dealers to
execute portfolio transactions for the Fund. See "Portfolio Transactions" in
the Statement of Additional Information.
SUB-INVESTMENT ADVISER -- NCM, located at 103 West Main Street, Durham, North
Carolina 27705-3638, a registered investment adviser, serves as the Fund's
Sub-Investment Adviser. NCM was incorporated in 1986 and is one of the
nation's largest minority-owned investment management firms. Prior to August
2, 1994, NCM had not advised a registered investment company. As of December
31, 1995, NCM managed or administered approximately $3.4 billion in assets.
NCM, subject to the supervision and approval of Dreyfus, provides
investment advisory assistance and the day-to-day management of the Fund's
portfolio, as well as research and statistical information under an Amended
and Restated Sub-Investment Advisory Agreement with Dreyfus, subject to the
overall authority of the Fund's Directors in accordance with Maryland law.
Under the Amended and Restated Sub-Investment Advisory Agreement,
Dreyfus has agreed to pay NCM an annual fee, payable monthly, as set forth
below:
<TABLE>
ANNUAL FEE AS A PERCENTAGE OF
TOTAL ASSETS AVERAGE DAILY NET ASSETS
<S> <C> <C>
0 up to $32 million........................... .10 of 1%
In excess of $32 million up to $150 million... .15 of 1%
In excess of $150 million up to $300 million.. .20 of 1%
In excess of $300 million..................... .25 of 1%
</TABLE>
The Fund's portfolio managers primarily responsible for management of
the Fund's portfolio are Diane M. Coffey, with respect to the Fund's areas of
special concern, and Maceo K. Sloan, with respect to selection of portfolio
securities. Ms. Coffey has held that position since March 1990 and has been
employed by Dreyfus since January 1990. From January 1983 to January 1990,
she served as Chief of Staff for New York City Mayor Edward I. Koch. Mr. Sloan
has held his position with the Fund since August 1994 and has been employed
by NCM since 1986. The Fund's other portfolio managers are identified under
"Management of the Fund" in the Fund's Statement of Additional Information.
Dreyfus also provides research services for the
Page 6
Fund as well as for other funds advised by Dreyfus through a professional
staff of portfolio managers and security analysts.
The Amended and Restated Sub-Investment Advisory Agreement between
Dreyfus and NCM, became effective on April 22, 1996. The Amended and Restated
Sub-Investment Advisory Agreement provides for an increase in the fees
payable by Dreyfus to NCM and contains a restriction on NCM's ability to act
as the investment adviser or sub-investment adviser for other funds with
socially responsible investment policies without the consent of Dreyfus or
the Fund. For the fiscal year ended December 31, 1995, Dreyfus paid NCM a
sub-advisory fee at an effective annual rate of .10 of 1%.
EXPENSES -- From time to time, Dreyfus may waive receipt of its fees and/or
voluntarily assume certain expenses of the Fund, which would have the effect
of lowering the overall expense ratio of the Fund and increasing yield to
investors at the time such amounts are waived or assumed, as the case may be.
The Fund will not pay Dreyfus at a later time for any amounts it may waive
nor will the Fund reimburse Dreyfus for any amounts it may assume.
Dreyfus may pay the Fund's distributor for shareholder services
from Dreyfus' own assets, including past profits, but not including the
management fee paid by the Fund. The Fund's distributor may use part or all
of such payments to pay securities dealers or others in respect of these
services.
All expenses incurred in the operation of the Fund are borne by the
Fund, except to the extent specifically assumed by Dreyfus. The expenses
borne by the Fund include: taxes, interest, brokerage fees and commissions,
if any, fees of Directors who are not officers, directors, employees or
holders of 5% or more of the outstanding voting securities of Dreyfus or NCM,
Securities and Exchange Commission fees, state Blue Sky qualification fees,
advisory fees, charges of custodians, transfer and dividend disbursing
agents' fees, certain insurance premiums, industry association fees, outside
auditing and legal expenses, costs of maintaining corporate existence, costs
of independent pricing services, costs attributable to investor services
(including, without limitation, telephone and personnel expenses), cost of
shareholders' reports and corporate meetings, cost of preparing, printing and
distributing prospectuses and statements of additional information, and any
extraordinary expenses.
Dreyfus has agreed that if in any fiscal year, the aggregate
expenses of the Fund, exclusive of taxes, brokerage, interest and (with the
prior written consent of the necessary state securities commissions)
extraordinary expenses, but including the management fee, exceed the expense
limitation of any state having jurisdiction over the Fund, the Fund may
deduct from the fee to be paid to Dreyfus, or Dreyfus will bear, the excess
expense. For each fiscal year of the Fund, Dreyfus and NCM will pay or bear
such excess on a pro rata basis in the proportion that the sub-advisory fee
payable to NCM bears to the fee payable to Dreyfus pursuant to the Management
Agreement. Such deduction or payment, if any, will be estimated, reconciled
and effected or paid, as the case may be, on a monthly basis and will be
limited to the amount of fees otherwise payable to Dreyfus under the
Management Agreement.
DISTRIBUTOR -- The Fund's distributor is Premier Mutual Fund Services, Inc.
(the "Distributor"), located at One Exchange Place, Boston, Massachusetts
02109. The Distributor is a wholly-owned subsidiary of FDI Distribution
Services, Inc., a provider of mutual fund administration services, which in
turn is a wholly-owned subsidiary of FDI Holdings, Inc., the parent company
of which is Boston Institutional Group, Inc.
CUSTODIAN AND TRANSFER AND DIVIDEND DISBURSING AGENT -- Dreyfus Transfer,
Inc., a wholly-owned subsidiary of Dreyfus, P.O. Box 9671, Providence, Rhode
Island 02940-9671, is the Fund's Transfer and Dividend Disbursing Agent (the
"Transfer Agent"). Mellon Bank, N.A., One Mellon Bank Center, Pittsburgh,
PA 15258, is the Custodian of the Fund's investments.
HOW TO BUY SHARES
Separate accounts of the Participating Insurance Companies place
orders based on, among other things, the amount of premium payments to be
invested pursuant to VA contracts and VLI policies. Individuals may not place
orders directly with the Fund. See the prospectus of the separate account of
the Participating Insurance Company for more information on the purchase of
Fund shares. The Fund does not issue share certificates.
Page 7
Purchase orders from separate accounts which are received by the
Participating Insurance Company by 4:00 p.m. on a given business day will be
effected at the net asset value determined on such business day if the orders
are received by the Fund in proper form and in accordance with applicable
procedures by 4:00 p.m., New York time, on the next business day and Federal
Funds (monies of member banks within the Federal Reserve System which are
held on deposit at a Federal Reserve Bank) in the net amount of such orders
are received by the Fund on such next business day. It is each Participating
Insurance Company's responsibility to properly transmit purchase orders and
Federal Funds in accordance with applicable requirements.
Fund shares are sold on a continuous basis. Net asset value per
share is determined as of the close of trading on the floor of the New York
Stock Exchange (currently 4:00 p.m., New York time), on each day that the New
York Stock Exchange is open for business. For purposes of determining net
asset value per share, options will be valued 15 minutes after the close of
trading on the floor of the New York Stock Exchange. Net asset value per
share is computed by dividing the Fund's net assets (i.e., the value of its
assets less liabilities) by the total number of shares outstanding. The
Fund's investments are valued based on market value or, where market
quotations are not readily available, based on fair value as determined in
good faith by the Board of Directors. For further information regarding the
method employed in valuing Fund investments, see "Determination of Net Asset
Value" in the Fund's Statement of Additional Information.
HOW TO REDEEM SHARES
Fund shares may be redeemed at any time by the separate accounts of
the Participating Insurance Companies. Individuals may not place redemption
orders directly with the Fund. Redemption requests from separate accounts
which are received by the Participating Insurance Company by 4:00 p.m. on a
given business day will be effected at the net asset value determined on such
business day if the requests are received by the Fund in proper form and in
accordance with applicable procedures by 4:00 p.m., New York time, on the
next business day. It is each Participating Insurance Company's
responsibility to properly transmit redemption requests in accordance with
applicable requirements. The value of the shares redeemed may be more or less
than their original cost, depending on the Fund's then-current net asset
value. No charges are imposed by the Fund when shares are redeemed.
The Fund ordinarily will make payment for all shares redeemed
within seven days after receipt by the Transfer Agent of a redemption request
in proper form, except as provided by the rules of the Securities and
Exchange Commission.
SHAREHOLDER SERVICES PLAN
The Fund has adopted a Shareholder Services Plan pursuant to which
the Fund reimburses Dreyfus Service Corporation, a wholly-owned subsidiary of
Dreyfus, an amount not to exceed an annual rate of .25 of 1% of the value of
the average daily net assets of the Fund's shares for certain allocated
expenses with respect to servicing and/or maintaining shareholder accounts.
DIVIDENDS, DISTRIBUTIONS AND TAXES
The Fund will pay dividends from net investment income and will
make distributions from net realized securities gains, if any, once a year,
but may make distributions on a more frequent basis to comply with the
distribution requirements of the Internal Revenue Code of 1986, as amended
(the "Code"), in all events in a manner consistent with the provisions of the
1940 Act. The Fund will not make distributions from net realized securities
gains unless capital loss carryovers, if any, have been utilized or have
expired. Dividends are automatically reinvested in additional Fund shares at
net asset value unless payment in cash is elected. All expenses are accrued
daily and deducted before declaration of dividends to investors.
Notice as to the tax status of dividends and distributions will be
mailed to shareholders annually. Dividends from net investment income,
together with distributions of net realized short-term securities gains and
gains from certain market discount bonds, generally are taxable as ordinary
income whether received in
Page 8
cash or reinvested in additional shares. Distributions from net realized
long-term securities gains of the Fund generally are taxable as long-term
capital gains whether received in cash or reinvested in additional shares.
Since the Fund's shareholders are the Participating Insurance Companies and
their separate accounts, no discussion is included herein as to the Federal
income tax consequences to VA contract holders and VLI policy holders. For
information concerning the Federal income tax consequences to such holders,
see the prospectus for such contract or policy.
Section 817(h) of the Code requires that the investments of a
segregated asset account of an insurance company be "adequately diversified"
as provided therein or in accordance with U.S. Treasury Regulations in order
for the account to serve as the basis for VA contracts or VLI policies. The
Fund intends to comply with applicable requirements so that the Fund's
investments are "adequately diversified" for this purpose. Section 817(h) and
the U.S. Treasury Regulations issued thereunder provide the manner in which a
segregated asset account will treat investments in a regulated investment
company for purposes of the diversification requirements. If a Fund satisfies
certain conditions, a segregated asset account owning shares of the Fund will
be treated as owning multiple investments consisting of the account's
proportionate share of each of the assets of the Fund. The Fund intends to
satisfy these conditions so that the shares of the Fund owned by a segregated
asset account of a Participating Insurance Company will be treated as
multiple investments.
Management of the Fund believes that the Fund qualified for the
fiscal year ended December 31, 1995 as a "regulated investment company" under
the Code. The Fund intends to continue to so qualify if such qualification is
in the best interest of the Participating Insurance Companies. The Fund may
be subject to a non-deductible 4% excise tax, measured with respect to
certain undistributed amounts of investment income and capital gains. If,
however, the Fund does not qualify as a "regulated investment company" it
will be subject to the general rules governing the Federal income taxation of
corporations under the Code.
Participating Insurance Companies should consult their tax advisers
regarding specific questions as to Federal, state or local taxes.
PERFORMANCE INFORMATION
For purposes of advertising, the performance of the Fund will be
calculated on an average annual total return or total return basis.
Average annual total return is calculated pursuant to a
standardized formula which assumes that an investment in the Fund was
purchased with an initial payment of $1,000 and that the investment was
redeemed at the end of a stated period of time, after giving effect to the
reinvestment of dividends and distributions during the period. The return is
expressed as a percentage rate which, if applied on a compounded annual
basis, would result in the redeemable value of the investment at the end of
the period. Advertisements of the Fund's performance will include the Fund's
average annual total return for one, five and ten year periods, or for
shorter periods depending upon the length of time during which the Fund has
operated.
Total return is computed on a per share basis and assumes the
reinvestment of dividends and distributions. Total return generally is
expressed as a percentage rate which is calculated by combining the income
and principal changes for a specified period and dividing by the net asset
value per share at the beginning of the period. Advertisements may include
the percentage rate of total return or may include the value of a
hypothetical investment at the end of the period which assumes the
application of the percentage rate of total return.
Performance will vary from time to time and past results are not
necessarily representative of future results. You should remember that
performance is a function of portfolio management in selecting the type and
quality of portfolio securities and is affected by operating expenses.
Performance information of the Fund should not be compared with other funds
that offer their shares directly to the public since the figures provided do
not reflect charges against Participating Insurance Companies. The effective
yield and total return for the Fund should be distinguished from the rate of
return of a corresponding subaccount or investment division of a separate
account of a Participating Insurance Company, which rate will reflect the
deduction of
Page 9
additional charges, including mortality and expense risk
charges, and will therefore be lower. VA contract holders and VLI policy
holders should consult the prospectus for such contract or policy.
Calculations of the Fund's performance information may reflect
absorbed expenses pursuant to any undertaking that may be in effect. See
"Management of the Fund."
Comparative performance information may be used from time to time
in advertising or marketing the Fund's shares, including data from Lipper
Analytical Services, Inc., Dow Jones Industrial Average, Standard & Poor's
500 Composite Stock Price Index, The VARDSsm Report, IBC/Donoghue's Money
Fund Report, FINANCIAL PLANNING MAGAZINE, MONEY MAGAZINE, Morningstar, Inc.,
Bank Rate Monitor, N. Palm Beach, Fla. 33408 or other industry publications.
GENERAL INFORMATION
The Fund was incorporated under Maryland law on July 20, 1992 and
commenced operations on October 7, 1993. In April 1996, at a meeting of
stockholders of the Fund, stockholders approved a change in the Fund's
fundamental policies and investment restrictions relating to its Special
Considerations and an Amended and Restated Sub-Investment Advisory Agreement.
The Fund is authorized to issue 150 million shares of Common Stock,
par value $.001 per share. Each share has one vote, has equal voting,
redemption, dividends and liquidation rights, and, when issued in accordance
with the terms of this offering, is fully-paid and non-assessable. Shares are
freely transferable and are redeemable at net asset value, at the option of
the shareholder.
Unless otherwise required by the 1940 Act, ordinarily it will not
be necessary for the Fund to hold annual meetings of shareholders. As a
result, Fund shareholders may not consider each year the election of
Directors or the appointment of auditors. However, pursuant to the Fund's
By-Laws, the holders of at least 10% of the shares outstanding and entitled
to vote may require the Fund to hold a special meeting of shareholders for
the purpose of removing a Director from office and the holders of at least 25%
of such shares may require the Fund to hold a special meeting of
shareholders for any other purpose. Fund shareholders may remove a Director
by the affirmative vote of a majority of the Fund's outstanding voting
shares. In addition, the Board of Directors will call a meeting of
shareholders for the purpose of electing Directors if, at any time, less than
a majority of the Directors holding office at the time were elected by
shareholders.
The Transfer Agent maintains a record of each shareholder's
ownership and will send confirmations and statements of account to each
shareholder.
Owners of policies and contracts issued by Participating Insurance
Companies for which shares of the Fund are an investment vehicle will receive
from the Participating Insurance Companies unaudited semi-annual financial
statements and audited year-end financial statements certified by the Fund's
independent auditors. Each report will show the investments owned by the Fund
and the market values thereof as determined by the Board of Directors and
will provide other information about the Fund and its operations.
Shareholder inquiries may be made by writing to the Fund at 144
Glenn Curtiss Boulevard, Uniondale, New York 11556-0144, or by calling toll
free 1-800-645-6561. In New York City, call 718-895-1206; outside the U.S.
and Canada, call 516-794-5452.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE
ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS AND IN THE
FUND'S OFFICIAL SALES LITERATURE IN CONNECTION WITH THE OFFER OF THE FUND'S
SHARES, AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST
NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND. THIS PROSPECTUS
DOES NOT CONSTITUTE AN OFFER IN ANY STATE IN WHICH, OR TO ANY PERSON TO WHOM,
SUCH OFFERING MAY NOT LAWFULLY BE MADE.
Page 10
DREYFUS
The Dreyfus
Socially Responsible
Growth Fund, Inc.
Prospectus
(LION LOGO)
Copy Rights 1996 Dreyfus Service Corporation
111p053196
